The consumer electronics industry is in the beginning of a major shift as entertainment systems move from the analog domain into the digital domain. Audio has moved into the digital domain with, e.g., compact disks and digital compact cassettes. Video will move into the digital domain rapidly within the next years. An all-digital multimedia system with digital audio and digital video opens up new possibilities to the consumer, owing to impressive digital processing capabilities that are becoming available for affordable prices. To mention a few of the new possibilities, real time video processing has come within reach of consumer apparatus; user control relies more and more on the system's intelligence thus rendering the system much simpler to operate and relieving the user from monitoring the system; multiple digital resources are going to be interrelated and integrated within a single home system.